The DOL just proposed two new rules to protect employers and employees who pool their healthcare premiums in multi-employer plans. If you’re among them, you’ll want to pay attention to what happens next.
Many Multiple Employer Welfare Arrangements (MEWAs) have fallen victim to excessive administrative frees and embezzlement. As a result, many workers have been cut off from needed healthcare services — or forced to pay for them out of pocket.
The DOL hopes to change that.
Currently under an MEWA, small businesses and self-employed individuals pool their healthcare premiums in exchange for less expensive coverage than traditional health plans offer.
The problem: Neither state nor federal law regulates the operation of these plans, and fraudulent operators take advantage of that loophole by siphoning money from the plans in multiple ways.
When a plan runs low on cash, workers can lose coverage or be forced to pay for medical care themselves, despite having paid premiums into the plan.
But under the DOL’s newly proposed rules:
- MEWAs must register with the DOL. This will allow the DOL to track the plans as they move from state to state.
- The secretary of labor will be able to issue a cease and desist when it’s suspected fraud is taking place, and
- The secretary could seize assets from any plan that appears to be in a “financially hazardous condition.”
The proposed rules are expected to be implemented in 2012, following a public comment period.